Tax Underpayment - How far back can they go?

stuartbrookes

Hi,

I'm hoping someone can help. I've just received a P800 Tax Underpayment, however it is bizarre.

One under-payment for £1263.20 in 2007/08.
One under-payment for £3223.06 in 2009/10.

It appears both times it is related to the car benefit not being deducted from the tax free amount, I have a company car.

However, here in lie my questions

1) Can they give me a bill for 2007/08? I've been told that for any underpayment in 07/08, they must have told be 5th April 2009?

2) It appears that my employers made a boo-boo somewhere along the line as 2008/09 was perfectly fine, but it looks like they failed to declare my car benefit for the 09/10 financial year. Thus, where does the responsibility lie, with my employers or myself?

Any advice would be greatly appreciated as we're talking of a total sum of near £4,500 that has come as shock.

Cupcake_Ems

Hi Stuart

It's that computer glitch again!:eek: HMRC have until 12 months after the end of the tax year to put in a claim, if they had been provided with all of the information needed to make the underpayment claim within this period. There is a possibility you can appeal it under ESC A19. I can't post the link (I'm a new user!) but do a Google search for HMRC ESC A19.

In terms of what your employer can or cannot deduct, they are largely bound by what HMRC tells them to do (your tax code) and it is your responsibility to flag it up if you think anything is wrong. It may be that the wrong code was issued and this was HMRC's error (esp if your employer got it right in 2008/09). What did your 2008/09 and 2009/10 P11d say? This is where the car benefit should have been declared.

All the information is on the HMRC page - good luck!

stuartbrookes

Thanks Ems.

It appears that my 08/09 P11D correctly listed all of my benefits, but the 09/10 didn't. On that basis, I believe it to be an employers error and am going to challenge it on that possibly.

Unfortunately, whilst I could have checked from the tax-code that HMRC issued to me, I had moved house and hadn't notified HMRC (hadn't even thought to really) that I'd moved, so I never received the tax code showing it was minus car benefits.

Mikeyorks

But the code is on all your payslips? And you have a copy of the P11D which is sent to HMRC?

On your OP ....... they can go back 6 years. But have opted to only go back to 07-08 for underpayments. Back to 04-05 for overpayments.

stuartbrookes

Hi Mike,

Yeah, but I'll be honest, I just naively assume that my tax code is correct and that our Payroll (which we outsource) get all my information correct... Its the fact that for some reason, our Payroll told HMRC that I no longer had a company car when I clearly did, that is getting me.

I know I'm liable for the tax, fair dinkum and I've learnt a lesson in future to actually read my tax code letter when HMRC send it to me. However, I am still going to question some of it through employers mistake, as my employer knew full well I had a company car, so for them to say otherwise is negligent on their part. Might be a long shot, but at £4.5k, I need some sort of assistance.

tonycarew

Stuart,have you read through the thread on this board(page 2 as I type) entitled MSE News : Thousands more could get tax written off using HMRC loophole.It appears to cover circumstances such as yours.
Many have had sucess and IMHO is not a loophole as such.
Good Luck
Tony.